Everything You’ve Wanted to Know About The Politics of Wall Street Clawbacks (And Were Afraid to Ask)

 From NY Magazine: “….If you or I screw up at our jobs, our bosses have lots of options. They can fire us, get us disinvited to the holiday party, turn us over to the police (if we did something really bad), or dock our pay for next year. What they can't do, generally, is take back money they've already paid us.

“Until a few years ago, those were also Wall Street's options, more or less. Unless an employee did something so incompetent or evil that it forced a firm to restate its financials after the fact (like saying "My unit made $2 billion last quarter" when the truth was "My unit lost $2 billion at the Bellagio"), everyone's past compensation stayed in their bank accounts, no matter how royally they screwed up.

“But after the financial crisis, regulators and lawmakers decided it was a good idea to be able to penalize people who, say, ran entire firms into the ground and walked away with $315 million. They inserted a provision in Dodd-Frank that required companies to be able to "claw back" pay from executives and other employees under certain circumstances.

What are those circumstances? Well, it depends..”

Read all about it at http://nymag.com/daily/intel/2012/07/politics-of-wall-street-clawbacks.html